The role of collective bargaining in attaining living wage in Tanzania, by Patricia Chao and Oscar Mkude

1. Introduction

Although there is no specific law in Tanzania which institutionalize the concept and application of living wage, the discussion among Trade unions and the recent ILO decent work agenda shows that Tanzania labour force is in need of not just wage but living wages. The laws in Tanzania provides for the minimum wages whose formation mechanism is that of tripartite board on minimum wages to advise the minister who has the liberty of making any alterations from the advice he/she got from the board and announce what would be called the minimum wage order.

Such practices has got its own pros and cons, however it’s not the intention of this paper to discuss the minimum wage, it is only being mentioned to draw the point of departure for the living wage agenda. One key weakness of the minimum wages is that, it has never been agreed by the parties on the right amount. In our view the cause of disagreement is the positions taken by the parties during the discussion. While the employers would dialogue with the views of minimum wage as the wage to protect the lowly paid workers and as the floor from which, in theory, the wages will be determined their counter parts, the trade unions, would argue from living wage point of view – the wage that would enable a typical worker run a decent life. Given these two different views it is never possible to have a consensus on the accepted level of minimum wages. The trade union in Tanzania in diverse events have expressed its concern for living wages and not minimum wage, the concern which is not given due regards by various stakeholders, at least for now.

In any case, the starting point to living wage would be the minimum wages. The collective bargaining agreements have been argued to be effective way of attaining to living wage agenda. This attest is supported by the fact that, the CBAs are workplace based, sector based or national based and as such they can address some specificity which could not easily be addressed under the minimum wage setting. More strong argument is that, a good CBA will contains other aspects which when looked holistically address the issues that living wage would do such as health insurance, working hours, better pay, maternity rights, occupation health and safety and social protection just to mention a few. Many countries, including Tanzania has had a  number of concluded CBAs which unfortunately are being regarded as confidential documents which limit the profit to the wide would be beneficiaries. The question however remains, to what extent does the trade union and employers use CBA as a tool to address the quest for living wage through social dialogue? This report analyse this question, basing on CBA dataset collected by Wage Indicator Foundation.

2. What is living wages?

There is no universally agreed definition of a living wage as a concept. The ILO defines the living wage as an amount ‘sufficient to meet the basic living needs of an average-sized family in a particular economy’. Given absence of agreed definition of living wage many have defined it differently but with common feature that it is a wage which affords the earner and her or his family the most basic costs of living. It is intended to cover the basic necessities for someone to live a decent life such as housing, food, childcare, transportation, healthcare, taxes and other basic necessities.

In the country where the living wage is statutory, specific legal regime is enacted to govern the implementation of the policy. However most of the countries, developing in particular, do not have explicitly policies that target the implementation of living wages despite the fact that, it is the most preferred other than the minimum wages by the trade unions since minimum wages do not necessarily give employees enough purchasing power to meet their basic needs. More often the minimum wage is insufficient to cover expenses for nutritious food and necessary medications. It is the growing attention to, and criticism of, such nature of minimum wages that has stimulated interest in the concept of the living wage. Therefore the idea of a living wage is basically a salary high enough to enable workers to meet their basic needs.

3. What is Collective Bargaining Agreements

Collective bargaining is specifically an industrial relations mechanism or tool, and is an aspect of negotiation, applicable to the employment relationship. As a process, the two are in essence the same, and the principles applicable to negotiations are relevant to collective bargaining as well (Silver, 1996). It draws its origin from the ILO’s Right to Organize and Collective Bargaining Convention (No. 98) of 1949 which describes collective bargaining as voluntary negotiation between employers or employers' organizations and workers' organizations, with a view to improve terms and conditions of employment by collective agreements. it is mainly seeking to improve the terms and conditions of employment for employees with views that will lead to improved productivity and workplace harmony.

It is basing on this definition of CBA and particularly on its feature of improving the working condition of the covered employees, we see the link between CBA and living wage concept as described in the following section.

4. Nexus between living wage and collective bargaining agreements

Since statutory living wages, in principle, are determined to enable the covered employees afford at least the basic need, we urge that there is link to collective bargaining agreements which are of the views to improve the employment conditions for the employees covered. While the living wage is statutory in nature, that is, the employer is obliged to comply, collective agreement is the result of collective bargaining, which means it has mutual interest considered for both parties embedded in it. It is against this understanding that this paper would like to see, to what extent the trade unions are using the CBAs as vehicle of attaining their wish of having living wage in Tanzania using available CBA dataset by Wage indicators.

The framework of our analysis will be on the key features which we think a typical CBA should contain if at all it has to address the aspects of living wages. These features are the inclusion of health benefits, reproductive rights, housing allowances and transport allowances for simplicity reason and testing our suppositions.

5. Findings

As mentioned above, these findings are basing on available information in the dataset for Tanzania. It should be noted that, despite the fact that Tanzania has signed approximately 100 CBAs in various sectors, we have been able to collect only about 30 as most of the trade union and to some extent employers too regards the CBAs as secret document between and among the parties. However we would like to challenge those who are taking such stand to learn from the practices elsewhere particularly USA through its Department of Labour[1]. We are of the views that through transparent the underserved workers will be able to benefit from the contents of CBAs signed by their counterparts in the sector. It is unfortunately that there are trade unions which are propagating the secrecy notion around the CBA, the questions is for whose benefits?

5.1 Health benefits

Health benefits in the workplace as observed in CBAs can take variety of forms such as health insurance covered by the employer, presence of designated hospital where covered employees can access health services at the cost of employer, sick sheet, refund of medical expenses and sick stipend.

Generally it has been noted that, almost all CBAs contains some element of health benefit as shown in figure 1.

Figure 1: CBAs with Health benefits to employees

Image 1

On access to free or subsidized medical service we note that note 21 with such provision and eight lacking it as shown in figure 2.

Figure 2: CBA with provision on access to medical service paid or subsidized by the employer

Image 2

For the living wage aspect to materialize as per the definition, access to health service paid or subsidized by employers should be extended to the dependants of the covered employees. On this count, figure 3 presents the findings where 58.6% of the CBA have the benefit extended to the dependants and 41.4% have it confined to the respective employees only.

Figure 3: CBA with extended health benefits to the dependants of the covered employees

Image 3

In figure 4 we note that 31% against 69% of the CBAs have extended the health benefits to relatives of the covered employees.

Figure 4: CBAs with Health benefits extended to the relatives of the covered employees

Image 4

The paper further explores the burden of contribution to the health insurance, since for the CBAs to have effect of living wage; the employer should cover all or significantly subsidize the cost of health insurance premium. Figure 4 provides the observed findings on this regards.

Figure 5: CBAs with employers required to contribute to Health Insurance for the Employees

Image 5

In figure 4 we observe that 18 CBAs oblige employer to contribute for health insurance schemes while 11 do not.

We have specifically noticed that there are 17 workplaces whose CBAs contain clauses which entitle health benefit to the covered employees[1]. Seven out of these have the benefits extended to the dependants of the covered employees. Few have gone as far as including life insurance for the covered employees which is paid by the employers. The benefit in the CBAs takes different forms such as health insurance scheme by employer, by pension fund, health benefit through refund of medical expenses and through designated hospital.

5.2 Reproductive rights

Reproductive rights in the perspectives of this paper includes maternity rights, breast feeding rights, paternity rights and other entitlements to an employees accrued on the fact that one has reproduced.

We have noticed seven CBAs contain health and safety clauses related to pregnancy and/or breastfeeding. Such clauses varies from exemption from night and hazardous shifts/works, special sick leaves to pregnant women and some time off for breastfeeding every day.

It is further noted that four CBAs contain clauses ensuring that pregnant or breastfeeding workers (and not ALL women) are not obliged to perform dangerous or unhealthy work. Two have clauses ensuring that alternatives to dangerous or unhealthy work are available to pregnant or breastfeeding workers (namely, elimination of risk, adaptation of working conditions, transfer to another post, paid leave with right to return to work). While only one CBA contain clauses requiring the employer to carry out a workplace risk assessment on the safety and health of pregnant or nursing women and inform them accordingly.

Moreover it is observed that two CBAs contain clauses on work and family arrangements (including pregnancy, maternity/paternity leave and childcare), other two contain clauses which prohibit (any form of) discrimination related to maternity, while nine CBAs contain clauses on job security for women wishing to return to work after maternity leave.

5.3 House, Transport and meal Allowances

None of the CBA has reference to housing allowance to the employees. However there are several which refer to transport and meal allowance.

It has been noted that five out of 30 CBAs available in the dataset for Tanzania provides meal allowances to the covered employees, particularly lunch. This is a step towards living wage since by such provision, the employee does not have to incur extra cost for his/her lunch.

There are at least 19 CBAs with clauses that provide for transport allowance to the covered employees.

6. Conclusion

From this quick analysis, it has been noted that indeed Collective bargaining agreements can be used as effective tools of attaining living wage agenda. To achieve this objective, the bargaining parties, particularly trade unions should have sufficient knowledge of what is already provided in the labour laws to avoid duplication of the provision of the labour and other laws in the CBA. This is important since CBAs is an additional or a step above the existing legal provision, it is of less value if it replicate what has already been granted by the laws.

It should be noted that collective bargaining is a length and dynamic process where the parties are expected to be read to adjust their positions until they reach collective agreement. To enable such adjustment process, the CBA knowledge and information should be widely available. Thus we argue the Trade unions to seriously consider whether holding the CBAs in secrecy is serving the members of deserving them. The website like this of wage indicator provide not only a freely accessible repository of such CBAs but also interactive tools which enables to make quick report to assess the situation in the market as per the CBA.

We have noted that, CBAs have great role to play in gradual attainment of the living wage agenda when special attention is taken to that direction. The countries with no statutory living wage policies should examine this possibility.

7. References

1. Sryan Silva,1996: Collective Bargaining Negotiation, ILO ACT/EMP as in

2. Wage Indicator Foundation as in

3. Wage indictor database as in

4. Department of Labour (DoL) USA as in